OTTAWA – Telesat posted flat revenues and a steep drop in profits for its first quarter of 2017, the company said Thursday.
For the period ended March 31, 2017, Telesat reported consolidated revenues of $235 million, unchanged from the same period in 2016. During the quarter, the U.S. dollar was approximately 4% weaker against the Canadian dollar than it was during the first quarter of 2016 and, as a result, there was an unfavorable impact on the conversion of U.S. dollar denominated revenues. Excluding the impact of foreign exchange rate changes, revenue increased by 1% ($3 million) year-over-year.
Telesat’s net income for the quarter fell to $88 million from $237 million last year as a result of a lower non-cash gain on foreign exchange arising principally from the translation of the company’s U.S. dollar denominated debt into Canadian dollars, partially offset by favorable changes in the fair value of financial instruments in the first quarter of 2017.
Operating expenses of $55 million for the quarter were 18% ($8 million) higher than the same period in 2016, or 20% ($9 million) higher excluding the impact of changes in foreign exchange rates. The increase in operating expenses was due to an increase in compensation and employee benefits expense arising from a special payment made during the quarter to stock option holders in connection with a return of capital of US$387 million to Telesat’s shareholders, partially offset by lower share-based compensation.
Adjusted EBITDA for the quarter was $192 million, an increase of 1% ($1 million) compared to the same period in 2016 and an increase of 2% ($3 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin for the first quarter of 2017 was 81.9%, as compared to 81.3% in the same period in 2016.
At March 31, 2017, Telesat said it had contracted backlog for future services of approximately $4.1 billion, and fleet utilization was 94% for its North American fleet and 67% for its international fleet.
“I am pleased with our performance in the first quarter,” said president and CEO Dan Goldberg, in a statement. “Compared to the same period last year, we achieved modest growth in revenue, Adjusted EBITDA and our Adjusted EBITDA margin. Looking ahead, we are focused on increasing the utilization of our available in-orbit capacity, maintaining our operating discipline and executing on our key growth initiatives.”
